Solvency 2
Recent studies by the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) have found that the primary cause of recent insurer failures and 'near misses' were as a result of poor management decisions and inappropriate risk management procedures. The Solvency 2 Directive proposal has a clearly stated aim of ensuring soundness of insurance and reinsurance undertakings across the EU, in particular to ensure that they are able to withstand periods of difficulty.
Solvency 2 represents a major overhaul of the capital adequacy regime for the European life insurance, non-life insurance and reinsurance market. It aims to replace the current Solvency 1 capital and risk management regime with a regime that better reflects the true underlying risks of each insurance firm. Insurers will need to rethink how they measure and manage their future risk and capital to safeguard their business and policyholders.
OAC Actuaries and Consultants have a wealth of experience in insurance valuation, provision of software solutions and embedding sound end-to-end processes for clients. We can offer specialist advice on how you can best manage the new regulatory framework in your firm.
OAC has produced a Mo.net template model specifically for QIS4. This QIS4 model is available with a free four-month trial of Mo.net - our affordable, next generation, powerful and easy to use financial modelling software.
The model contains the functionality needed to calculate:
- life insurance best estimate technical provisions;
- risk margins calculated on Cost of Capital basis as specified in QIS4;
- SCR calculated on QIS4 standard calculations; and
- MCR calculated on the linear approach as specified in QIS4.
The QIS4 template model can be easily customised to suit your requirements. OAC can help with customising the model to fit your products and provide advice on determining appropriate inputs and assumptions.
Mo.net provides the ideal platform for modelling some of the very complex financial projections required. The following lists examples of the scope of Mo.net's Solvency 2 actuarial applications:
- Realistic valuation models.
- Internal capital models.
Contact us to discuss your actuarial modelling needs.
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